Performance-based funding could disrupt community colleges

By Ron Bethke, eCampus News Assistant Editor, @eCN_RonB

April 1st, 2015

A new report on performance-based funding reveals potential downfalls that could disrupt community colleges in the long run.

Performance-based funding (PBF) has become progressively utilized in order to reward higher education institutions for their success in enhancing student advancement and completion, but may have some critical drawbacks.

Data has increasingly shown that performance-based funding may cause some undesirable side-effects, such as more prestigious schools only admitting students who are likely to graduate, while institutions that serve a greater number of disadvantaged students fall even further behind without the additional funding.

Still, 35 states have already taken steps to adopt PBF initiatives. Texas adopted PBF for the state’s 50 community colleges in 2013, and their Student Success Points Model gives funding based on student achievement of intermediate performance metrics, such as completing developmental coursework or passing college-level gatekeeper courses; as well as key milestones such as earning a certificate or associate degree, or having students transfer to four-year universities.

For each of those “success points,” the state awards $185 to each college. While this money currently only accounts for 10 percent of state funding, some are proposing to increase the pool to 25 percent of funding for colleges.

Dr. Lyle McKinney and Dr. Linda Serra Hagedorn conducted a study on this policy and reported their findings on ACE’s Higher Education Today blog. The study “retroactively applied each of the success point metrics from Texas’ PBF model to a cohort of 5,900 first-time-in-college students who entered a large, ethnically diverse, urban community college system in Texas in fall 2007,” and then tracked their progress across the next 6 academic years in order “to understand which students would procure little, or no, PBF for the college during their time of enrollment.”

(Next page: learn about the findings of the study and how they reflect on PBF)